Disclaimer:
The information on this website is for general guidance only and does not constitute financial or investment advice. Always do your own research and seek personalised advice from a qualified financial adviser or mortgage adviser before making financial decisions. All investments carry risk and past performance is not indicative of future results.
Key Takeaways
- Consider ordering a current LIM report before committing to a purchase.
- Use LIM findings to spot unconsented work or hazards.
- Build LIM timing into your due diligence conditions.
- Complete LIM checks before auctions, as sales are unconditional.
- Get legal advice if issues arise or disclosures are unclear.
Schnauer & Co deal with many first home buyer enquiries. Often first home buyers find the conditional stage very overwhelming as there is a lot of new information to process. In this article, we will attempt to clarify the steps required, associated risks, answer some of the commonly asked questions and provide possible solutions.
We suggest you read this article after reading our earlier article "So, you think you are ready to make an offer?".
Conducting thorough due diligence before purchasing a property is important. A Land Information Memorandum ("LIM") report, prepared by the local council, summarises current council-held property information, including matters such as zoning, rates, hazards, drains, notices, and consents or permits recorded by council. Skipping a LIM report may save money upfront, but it can leave gaps in your due diligence and create costly surprises later, especially if council records show hazards, consent issues, rates or notices that affect the property.
Why a LIM Report Can Help
A LIM report helps identify potential issues before purchase. These can include unconsented work such as unauthorised renovations, environmental risks like flooding or erosion, zoning and land use restrictions, and outstanding rates or regulatory concerns. Any of these findings could affect your decision to proceed with the purchase or influence the terms you negotiate.
If problems arise, your options depend on the wording of the agreement and any conditions. You may need to negotiate, seek more information, or decide whether you can withdraw, with advice from your lawyer or conveyancer.
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Building Reports Matter Too
If you rely on a building-inspection condition, use a suitably qualified or accredited inspector and check what the condition requires. Settled notes a seller may ask to see the physical report if you withdraw on that ground, and lenders or insurers may ask for property-specific information.
Learn More: Why Building Reports Are Essential for First Home Buyers
LIM Reports for Auctions
Because auction purchases are usually unconditional, complete your due diligence well in advance. This can include ordering or reviewing LIM and council information, confirming finance, and having legal documents checked before bidding.
Important: auction bids are usually unconditional. Complete property, finance and legal checks before bidding, and ask your lawyer or conveyancer about any variation or condition before the auction.
Understanding LIM Report Limitations
LIM reports summarise current information held by council on the day they are produced; they do not include everything about a property. For example, if council has not been notified of an issue, it may not appear. Reviewing the council property file and consent records can help cross-check past modifications.
What If Issues Are Found?
If your LIM report highlights concerns, you should consult your legal adviser to determine your options. Consider negotiating with the seller to remedy the issues before settlement, and check whether the defect affects your ability to obtain lending or insurance. If disclosure or representation issues arise, ask your lawyer about the agreement wording, available evidence and possible remedies.
Using a Seller-Provided LIM Report
If a seller or agent provides a LIM, check when it was prepared, who ordered it, and whether it is complete and unaltered. Consider ordering a current LIM in your own name and ask your lawyer or conveyancer before relying on a third-party report.
Note: Do not rely solely on a seller-provided LIM without checking its date, source and completeness with your lawyer or conveyancer. Ordering a current LIM can reduce the risk of relying on an outdated or altered report.
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Frequently Asked Questions
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Have a question about this?
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